Health insurance has long been a business-to-business endeavor between insurers, employers, hospitals and doctors.
Patients received benefits, but they weren’t really customers.
That’s all about to change. And Indianapolis-based information technology firm Healthx Inc. is capitalizing on health insurance’s shift to become a business-to-consumer marketplace.
The 15-year-old company develops Web portals and mobile apps for insurers, employers and physicians. Its pitch is that it can not only help members sign up for their health insurance benefits, but now also engage them with tools designed to keep them healthier, avoid the need for expensive surgeries, and manage medical expenditures.
“The market is demanding this whole digital relationship. And that’s what we’re good at,” said Mitch Hansen, executive vice president of Healthx, sitting in a conference room at Healthx’s headquarters near Keystone Avenue and East 96th Street.
Health insurers are not. They haven’t had to be.
For example, Indianapolis-based WellPoint Inc. provides health benefits to more Americans than any other company. But only 5 percent of the participants in its health plans buy directly from WellPoint.
That will change in less than two months, when the health insurance exchanges created by Obamacare start up, providing logistical help and financial subsidies to buy directly from insurers.
Wall Street analysts expect WellPoint’s number of individual customers to shoot up from 1.8 million today to 3.5 million in 2014. And the growth likely will continue after that.
WellPoint expects its bread-and-butter business with employers to remain flat or decline slightly. But even that area is adopting some business-to-consumer elements.
More employers have adopted high-deductible health plans to require consumers to be more cost-conscious about their medical expenses. But to really make those plans work, employers are also giving workers easy-to-use tools to check the price of health care procedures and to digitize and centralize the flood of paperwork that comes afterward from insurers and health care providers.
“Under health reform, we’re going to be able to engage with our consumers,” said WellPoint CEO Joe Swedish. “There will be a lot more direct-to-consumer communication, a lot more transparency around cost and quality.”
WellPoint’s chief technology officer admitted in July the company’s in-house attempts to create engaging mobile apps had flopped, so WellPoint is now looking to outside firms like Healthx.
Also last year, WellPoint agreed to work with San Francisco-based Castlight Health, which has created an Expedia-like software guide to give consumers price information about health care providers.
Now, Swedish said, WellPoint is reviewing its more than $1 billion in annual spending on information technology to make changes to become more consumer-focused.
“We’re probably going to shift a lot of technology, in terms of how we support the buyer,” Swedish said. “It will be required to better educate the consumer how to access the system. Before, it was more B2B. And now we’re going to be more B2C.”
Hansen said most insurers are doing similar things. He thinks Healthx has software tools to help with all those things. Its list of employer and insurer clients has already grown by 20 this year, to 150. WellPoint’s RightChoice is one of those clients, as is UnitedHealthOne, the Indianapolis-based individual insurance business arm of Minnesota-based UnitedHealth Group.
Other clients include Indianapolis-based health insurer Advantage Health Solutions, Indianapolis-based electronics retailer HH Gregg Inc. and Healthfirst New York, a Medicaid managed care plan with 1 million members.
Healthx’s annual revenue of $20 million has been growing and will continue to grow 15 percent to 20 percent, Hansen said.
The company is also moving more into wellness, which is another big emphasis for both employers and insurers. This fall, Healthx will ramp up the use of remote monitoring devices that feed information to clinicians employed by health insurers, who can then intervene with the patients that appear most at risk of a medical emergency.
The information can also help payers communicate with nearly real-time information, so they can play a more significant role in helping to manage patients with chronic diseases, such as diabetes and hypertension.
That kind of interaction is a long way from health insurers’ traditional role as a company that simply processed medical bills.
“You and I have a relationship with our doctors. We don’t really have a relationship with our payer,” Hansen said. “They’re a step behind in the relationship game.”•